Morning Headlines: Apartment Market Cooling in Center City

Photo of Southstar Lofts by Laura Kicey.

Photo of Southstar Lofts by Laura Kicey.

On the heels of yesterday’s news about home ownership taking a nosedive comes a report from Delta Associates via the Philadelphia Business Journal outlining an uptick in apartment vacancies in Center City.

According to Natalie Kostelni, the report found a vacancy increase in South Jersey, the suburbs and Center City between mid-year 2013 and now. That puts vacancies in Center City at 5 percent, South Jersey at 4.5 percent and the suburbs (a coy term for a variety of areas, one must add) at 5.7 percent.

Rents, Delta found, are also taking a hit in Center City, falling 1.6 percent to $2,141. In the burbs, it’s a different story, where rates have actually gone up to an average of $1,447 a month.

All of this begs some questions about the new residential construction seemingly everywhere downtown.

With about 5,025 units under construction or on the drawing board, “Philadelphia’s supply-demand relationship indicates that vacancy will continue to edge up slightly and rent growth is likely to stay negative over the next 24 months.”

Yikes. But not to worry, Delta says. All will be well. Somehow … vaguely.

In spite of some of this initial concern about the number of units that will eventually hit the market in Philadelphia, Delta is confident that demographic trends toward renting and urban living will eventually support what ultimately gets built.

More news this way …
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Heat Map: Home Prices in the Last 10 Years

RealtyTrac released this heat map today, and it’s pretty interesting if you can wrap your head around the various data points on which the map is based:

RealtyTrac analyzed median residential property prices from January 2004 through March 2014 in 1,567 counties nationwide, identifying the peak and trough prices and the months in which those occurred. The analysis also looked at the percentage from peak for median prices in March 2014 as well as percentage peak in each year from 2004 to 2013.

Note this local bit:

724 counties (46 percent) were still 30 percent or more below 10-year peaks in March 2014, including Philadelphia County, Pa., at 31 percent below peak.

 

 

Philadelphia Is in Top 10 Luxury Homes Markets

When it comes to the housing market, it’s always a case of good-news/bad-news. Let’s start with the bad news: overall, sales are down this year. Now the good news: sales of luxury homes — that means sales of homes priced in the top 1 percent – are on the are way up. Big time. According to Redfin, at least 10 markets have seen more than 40 percent growth in the luxury category this year, with Philadelphia coming in at No. 10. The minimum price of a luxury home in Philly is $1.15 million.

Below, the national chart (click to enlarge) and the three local areas that have the highest sale prices.

Philly Is in Top 10 Metros Where Home Buyers Pay Cash

Chart by Redfin.

Chart by Redfin.

According to Redfin, 32 percent of homes purchased in 2014 in the country’s 17 largest cities were paid for with cold, hard cash. Since 2011, cash sales have represented about a third of the market activity. The reasons?”Tighter mortgage lending standards, investor purchases and fewer homes on the market,” says Redfin.

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Midday Headlines: Real Estate Market Edition

housing in graduate hospital

Photo: Liz Spikol

Sometimes you hear millennials are the key to the housing recovery. Other times you hear they’re ruining everything. And that’s not the only conflicting report out there. Today we have a handful of recent stories that will, we hope, clarify things — even though they may hold opposing points of view.

Housing Barometer: Recovery Staggers Forward [Daily Finance]
What Housing Recovery? [NYT]

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Morning Headlines: Philadelphia’s Booming Luxury Rental Market

Photo credit: SouthStarLofts.com

Photo credit: SouthStarLofts.com

While the for-sale market experiences up and downs in a post-recession world, things are looking pretty good for the luxury rental market in Philadelphia. What are the factors determining this success?

Relatively cheap real estate, for one. Though the Inquirer’s Alan J. Heavens notes that “by Philadelphia standards, prices locally are recovering to pre-housing-downturn levels,” real estate investment professional Spencer Yablon tells Heavens that “by comparison to other markets, [Philadelphia] real estate is still cheap.”

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Pew: Housing Market Is the Bright Spot in Philly’s Cloudy Skies

millennialsA younger, better educated, upwardly mobile horde has descended on Philadelphia, transforming swaths of the city into something barely recognizable to old-timers. This demographic touched off a residential building boom last year, the single strongest positive indicator of the city’s rebound, according to the Pew Philadelphia Research Initiative’s latest “Philadelphia: State of the City” update.

More than half of all Philadelphians are now under the age of 35, and 26 percent are between the ages of 20 and 34, when young adults are in the process of launching careers and households. Building places for these residents to live has become a growth industry: in 2013, the city issued building permits for 2,815 new housing units, the most in a decade. That new construction has an estimated value of $465 million, the highest on record.

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Morning Headlines: Winter Keeps Homebuyers Away From South Jersey

home for sale

Cold bursts may be a tiresome frustration for Philadelphians longing for spring, but in South Jersey the implications of cold weather are more concerning: The real estate market there is taking quite a hit.

The problem is that when it snows, potential homebuyers are less likely to go house-hunting at the shore. Other factors are at play as well, according to CBS Philly: “New Jersey’s job growth is behind the national average and mortgage rates have gone up.”

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Philadelphia: Second Best Market for Home Buying in U.S.

Detail from Zillow's Buyers and Sellers map.

Detail from Zillow’s Buyers and Sellers map.

This is good news! Zillow.com has ranked Philadelphia No. 2 in its list of the 10 best buyers’ markets. What does that mean? From Zillow Blog:

In buyers’ markets, homes for sale stay on the market longer, price cuts occur more frequently and homes are sold for less relative to their listing price.

“In the East, housing markets are appreciating a bit more slowly, and homes are staying on the market longer, which helps give buyers the upper hand,” said Zillow Chief Economist Dr. Stan Humphries

“In general, buyers in sellers’ markets this spring can expect tight inventory, increased competition and a greater sense of urgency. Sellers in buyers’ markets may need to be prepared to lower their asking price, or to wait longer for the perfect buyer to come along.”

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Adventures in Home Buying: The Appraisal Waiting Game

emailAs I have alluded, we are squarely in the middle of the hurry-up-and-wait phase of home buying. Back in the salad days of February, I foolishly believed that the toughest part was behind us. That was before I was reminded that our mortgage involves an appraisal. Which we are currently on pins and needles awaiting.

For those of you not in the know, should the appraisal come in under what we and the sellers have agreed to pay for the home, renegotiations begin. So I’m a little stressed. Some people do productive things like clean or bake or read when they’re stressed. I tend to turn things over in my head until they are rubbed smooth and I am a ball of nerves. Also, I make lists.

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